Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash $ 132,000 $ 129,000 Accounts receivable 341,000 489,000 Inventory 567,000 478,000 Plant and equipment, net 880,000 864,000 Investment in Buisson, S.A. 395,000 433,000 Land (undeveloped) 248,000 255,000 Total assets $ 2,563,000 $ 2,648,000 Liabilities and Stockholders' Equity Accounts payable $ 389,000 $ 345,000 Long-term debt 974,000 974,000 Stockholders' equity 1,200,000 1,329,000 Total liabilities and stockholders' equity $ 2,563,000 $ 2,648,000 Joel de Paris, Inc. Income Statement Sales $ 5,044,000 Operating expenses 4,186,520 Net operating income 857,480 Interest and taxes: Interest expense $ 114,000 Tax expense 202,000 316,000 Net income $ 541,480 The company paid dividends of $412,480 last year. The “Investment in Buisson, S.A.,” on the balance sheet represents an investment in the stock of another company. The company's minimum required rate of return of 15%. Required: 1. Compute the company's average operating assets for last year. 2. Compute the company’s margin, turnover, and return on investment (ROI) for last year. (Do not round intermediate calculations and round your final answers to 2 decimal places.) 3. What was the company’s residual income last year?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Financial data for Joel de Paris, Inc., for last year follow:

Joel de Paris, Inc. Balance Sheet
	Beginning Balance		Ending Balance
Assets
Cash	$	132,000		$	129,000
Accounts receivable		341,000			489,000
Inventory		567,000			478,000
Plant and equipment, net		880,000			864,000
Investment in Buisson, S.A.		395,000			433,000
Land (undeveloped)		248,000			255,000
Total assets	$	2,563,000		$	2,648,000
Liabilities and Stockholders' Equity
Accounts payable	$	389,000		$	345,000
Long-term debt		974,000			974,000
Stockholders' equity		1,200,000			1,329,000
Total liabilities and stockholders' equity	$	2,563,000		$	2,648,000

Joel de Paris, Inc. Income Statement
Sales			$	5,044,000
Operating expenses				4,186,520
Net operating income				857,480
Interest and taxes:
Interest expense	$	114,000
Tax expense		202,000		316,000
Net income			$	541,480

The company paid dividends of $412,480 last year. The “Investment in Buisson, S.A.,” on the balance sheet represents an investment in the stock of another company. The company's minimum required rate of return of 15%.

Required:

1. Compute the company's average operating assets for last year.

2. Compute the company’s margin, turnover, and return on investment (ROI) for last year. (Do not round intermediate calculations and round your final answers to 2 decimal places.)

3. What was the company’s residual income last year?

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions